The disaggregation of the projected impacts of automation in the regional labour markets between 2019 and 2030: Case of the Czech Republic

Abstract

The ongoing technological changes related to advances in digital technology will soon be reflected in changes in the required qualifications of workers, which will subsequently have an impact on the rate of unemployment, employment, and economic activity. The theoretical discussion in this study shows that aggregate effects will not be very strong or even negative. However, regional impacts within economies may be profound and negative. The main objective of this study is to propose a methodology to illustrate how the countrywide effects of automation can be disaggregated into regional impacts. The projection is based on population projections for the Czech Republic and its regions, and information drawn from other research related to the projection of economic activity and aggregate impacts of automation on employment in the Czech Republic. The results show that the regional impacts of automation depend on the level of education and the share of manual labour, which correlate with disposable income, and the degree to which economic activity and unemployment react to changes in employment.